Existing-home sales continue strong pace In Baltimore region, figure climbs 15% for September

Gains for 4th month in row

Optimism runs high as interest rates stay low, economy strong

October 19, 1997|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

Existing-home sales in the Baltimore metropolitan region continued to surge last month by posting their strongest upswing since December.

Sales leaped 15 percent in September over the same period last year, and it marked the fourth consecutive month of gains for a market that, until the beginning of summer, had been in the doldrums.

According to figures released last week by the Maryland Association of Realtors, every jurisdiction showed an increase, led by Carroll, Harford and Baltimore counties. Carroll was up by 54 percent over September 1996, Harford posted a 22 percent gain and Baltimore County was up 21 percent.

Anne Arundel had a 9 percent gain, Howard County was next at 7 percent and Baltimore City was up 2 percent.

"We had a very strong September," said Patrick T. Welsh, sales manager for the Dundalk office of O'Conor, Piper and Flynn. "Employment in the southeastern part of the county has stabilized, and generally the economy seems to be on the upswing. If I could have 12 months like September, I'd be a very happy sales manager."

Judy Hoke, sales manager at ERA Caton Realty in Ellicott City, said that in her area, which covers Catonsville, Woodlawn, Arbutus, Edmondson Park and Westview Park, sales were also strong. She attributed it to steady interest rates.

"We're all very optimistic that it is going to stay this way for a while," Hoke said. "The good interest rates overall have been a big help for us. I don't remember in the last 20 years of them being this steady for this long, and it has helped out the market."

Rates, although rising slightly last week, have remained below 7.5 percent.

"We have had almost profound stability this year," said Keith Gumbinger, vice president of HSH Associates, a New Jersey firm that monitors mortgage rates. "Interest rates are on a path to be the most stable in terms of a high-point and low-point range since 1988, for national numbers."

Gumbinger, when reviewing Baltimore area rates, said that interest rates in July -- which would have been reflected in September sales figures -- were about 1 percentage point lower than they were in July 1996.

In October 1996, the average rate for a 30-year fixed-mortgage was 7.99 percent. Last week, the Freddie Mac survey rate for that mortgage was 7.34 percent.

"You can't beat it," Gumbinger said. "It's pretty hard to find any bad things to say about real estate or the mortgage rates. There's been less and less bad news for the last couple of years that we've come along."

Diana Hirschhorn, of Century 21 Joan Ryder in Bel Air, said the competition between new construction and existing homes for buyers in Harford County has become "fierce," but overall "the last couple of months have been very, very strong."

"Things that we've had [for months] are selling, and new listings aren't staying around for long," Hirschhorn said.

Welsh agreed. "Things dipped a bit in spring, and we couldn't figure out why that happened. But now it's happening," he said, adding that in Baltimore County there "doesn't seem to be one place burning it up right now, [sales seem to be] uniform across the county."

Pending sales, an indication of future activity, were up 1 percent for the region, but Carroll and Anne Arundel showed higher gains. Carroll had a 31 percent increase over September 1996 figures, followed by Anne Arundel at 25 percent.

One aspect that apparently has entered into the sales equation and is becoming more noticeable to some Realtors is the effect of the new capital-gains tax law.

The law, passed this summer and retroactive to home sales of May 7, eliminated the $125,000 one-time "exclusion" on profit for home sellers 55 or older.

In its place, married home sellers who file their federal taxes jointly will be able to take up to $500,000 in home-sale gains tax-free, provided they used the property as their principal residence for two of the previous five years. And apparently it's beginning to have some impact.

"I do believe that the new legislation has helped us to market more expensive properties," said Cindy Ariosa, a branch manager for Coldwell Banker Grempler Realty in Timonium.

"We had quite a bit of people waiting to see what the outcome of that was going to be," she said. "We're in a market area where we do have areas and pockets of empty-nesters, and we have quite a bit of our inventory [more than $250,000] come on the market because of legislation just passing, so I think it will help us throughout the year now."

Pub Date: 10/19/97

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